SUPPORTING STATEMENT FROM MUSLIM COUNCIL
We understand that that a review process has
been proposed to consider charging interest at the government
rate of borrowing as opposed to the present inflation uprating
on student loans.
As you know some Muslim students have objected
even to the inflation uprating as they consider it to constitute
interest (riba). Many have not taken out student loans for this
However, if the proposal to peg the rate charged
to more market oriented rates is approved then many more Muslim
students will stop to avail themselves of student loan finance
as it would be difficult not to
classify such charges as not constituting riba.
If, as we expect, the number of Muslim students
not comfortable with taking up student loans under such revised
terms becomes very large, then the impact on the willingness of
many students to continue their education could be grave.
It is, therefore, our view that any review process
should consider the adverse impact of tying loan charges to market
rates rather than inflation uprating on the Muslim student population.
We strongly advocate that the present arrangement
M Iqbal Asaria
Chair, Business & Economics Committee,
Muslim Council of Britain.